Kuwait's cabinet on Sunday dismissed Iraqi charges that the emirate has been stealing oil from a border field and called for a UN commission to investigate.

"The cabinet welcomes forming a neutral technical commission to be assigned by the UN Security Council to investigate Iraqi allegations and inspect Kuwaiti oilfields," the government said after its weekly cabinet meeting.

"But the investigation must also include production of oilfields and wells inside Iraq near the borders with Kuwait, with the aim of establishing the truth, and hold the two sides bound by the outcome," it said.

Iraq's charges -- similar to those raised on the eve of its 1990 invasion -- are "lies and fabrications," the government said in a statement.

An Iraqi official, meanwhile, accused Kuwait's emir of seeking to "divert attention" of the Arab world from the Palestinian Intifada against Israel by complaining of alleged Iraqi threats to its neighbor.

"He is also trying to divert the attention of the Arab people from Iraq's call to work for the liberation of Palestine through jihad," or holy war, he said, quoted by the official news agency INA.

The emir, Sheikh Jaber al-Ahmad al-Sabah, charged Saturday that the Iraqi leadership was still showing "aggressive and evil intentions" against the tiny Gulf state which Iraq invaded in August 1990.

"The (new) Iraqi threats, coupled with its intensifying propaganda against the state of Kuwait and massing of Iraqis near the border, is not strange," Sheikh Jaber said.

"This only comes to confirm, to those who might have an illusion, that the Iraqi regime hides aggressive and evil intentions against the state of Kuwait and other countries in the region," he said in a message to parliament.

Iraqi forces were driven out of the emirate in the 1991 Gulf War -- KUWAIT CITY (AFP)